R. Wolfe became the new auditor for Royal Corporation, succeeding C. Mason, whoaudited the financial statements last year. Wolfe needs to report on Royal’s comparativefinancial statements and should disclose in the report an explanation about other auditorshaving audited the prior yeara. Only if Mason’s opinion last year was qualified.b. To describe the prior audit and the opinion but not name Mason as the predecessor auditor.c. To describe the audit but not reveal the type of opinion issued by Mason.d. To describe the audit and the opinion and name Mason as the predecessor auditor

You are meeting with executives of Cooper Cosmetics Corporation toarrange your firm’s engagement to audit the corporation’s financial statements for the year ending December 31. One executive suggests the audit work be divided among three staff members. One person would examine asset accounts, a second would examine liability accounts, and the third would examine income and expense accounts to minimize audit time, avoid duplication of staff effort, and curtail interference with entity operations.Advertising is the corporation’s largest expense, and the advertising manager suggests that a staff member of your firm whose uncle owns the advertising agency that handles the corporation’s advertising be assigned to examine the Advertising Expense account because the staff member has a thorough knowledge of the complex contact between Cooper Cosmetics and the advertising agency. Required:a. To what extent should auditors follow the client’s suggestions for the conduct of an audit? Discuss.b.…

The senior auditor of Probiz Ltd was in the process of reviewing the board minutes of Raymars Ltd as the auditor you are concerned about the possibility of contingent liabilities resulting from income tax disputes. Discuss the procedures you could use for an extensive investigation in this area.

An auditor issues a report dated 2/12/Year 2 on financial statements for the year ended 12/31/Year 1. Which best describes the auditor's responsibility for an event occurring on 2/1/Year 2 and an event occurring on 3/1/Year 27 A. The auditor has an active responsibility to investigate both events. B. The auditor has an active responsibility to investigate the 2/1/Year 2 event, but no responsibility concerning the 3/1/Year 2 event. C. The auditor has an active responsibility to investigate the 2/1/Year 2 event, and must also consider the effect of the 3/1/Year 2 event if it comes to his/her attention. D. The auditor has no responsibility for either event, since both occur after the date of the financial statements.

At the closing meeting, a representative of the top management of the auditeeorganisation informs the auditor that they have now implemented a processto correct a serious nonconformity that the auditor found on the first day of atwo-day Stage 2 audit. The representative of top management proposes thatthe auditor examine the process during the meeting and then withdraw thenonconformity report. How should the auditor respond?

Consider the following statements: I. For an audit of a non-public company a issue involving information in the “Management         Discussion and Analysis section of the company’s annual report would be addressed in an         Other Matter paragraph. II. The new PCAOB audit report includes a section involving Key Audit Matters. I is true;   II is true I is true;   II is false I is false;  II is true I is false;  II is false

As of the end of the fiscal period under audit, the auditor will request a special kind of confirmation, or written representation, from the client's attorneyls). This representation is commonly referred to as OA a lawyer's letter. OB an attorney's representation letter. OC neither of the preceding OD. both of the preceding

Subsequent Events and Subsequently Discovered Facts. Michael Ewing is auditing the financial statements of Dallas Company for the year ended December 31, 2017. In concluding the process of gathering sufficient appropriate evidence, Ewing has asked to meet with his supervisor on the audit (John Ross) to discuss responsibility for events occurring afterthe date of the financial statements.Required:a. What is a subsequent event? During what time period is Ewing responsible for subsequent events?b. List some procedures that Ewing may perform to assist him in identifying subsequent events.c. What are two types of subsequent events? How should information related to these types of subsequent events be reflected in Dallas’s financial statements?d. Assume that on January 8, 2018, Dallas Company agreed to acquire Houston Inc. in a significant transaction. The date of Ewing’s report was February 7, 2018, and Dallas issued its financial statements (and Ewing’s reports on its financial statements…

Consider the following independent situations relating to the audit of five different audit clients for year ended 30 June 20X8. Assume that all the situations are material. For each of the above cases, state the appropriate audit opinion that the auditor would require. Give reasons 1. new client has changed its valuation method of property, plant and equipment. It has adopted the Fair Value Revaluation Model to replace the Historic cost measurement method. Whilst the auditor does not object to the change in the valuation model, the new method has a material effect on the financial statements and has not been disclosed. A special meeting was held between the CFO and the Finance Team and the Lead Partner from the Audit team, but nothing was resolved 2. (ii) A new start-up company specialising in air-drone mail/package delivery has grown strongly in the past year. Over the past three years the company has made consistent losses, borrowed heavily, experienced staff turnover and dealt with…

The standard unqualified opinion based on the audit of a public company's financial statements includes a. A discussion of Key Audit Matters if KAMs are discovered. b. A reference to Key Audit Matters if no KAMs are discovered. c. A statement that the CPA firm is registered with the AICPA. d. An indication of how long the firm has served as the company's auditors. e. A Basis for Opinion section preceding the Opinion of Financial Statements section.